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aleksley [76]
3 years ago
9

Joe is the owner-operator of Joe's Haircuts Unlimited. Last year he earned $100,000 in total revenues and paid $35,000 to his em

ployees and suppliers. During the course of the year, he received three offers to work for other barbers, with the highest offer being $55,000 per year. What is Joe's accounting profit?
Business
1 answer:
Agata [3.3K]3 years ago
3 0

Answer:

Accounting profit= $65,000

Explanation:

Giving the following information:

Last year he earned $100,000 in total revenues and paid $35,000 to his employees and suppliers.

The difference between the accounting profit and the economic profit is that the last one includes the opportunity cost.

In this case:

Accounting profit= 100,000 - 35,000

Accounting profit= $65,000

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Answer:

The WACC before bond issuance is 3.9% and the WACC after bond issuance is 3.71%

Explanation:

In order to calculate the WACC before bond issuance , we would have to calculate first the cost of equity  using capital asset pricing model .

So Using CAPM we have Rf + Beta x Market risk premium

= 0.5% + 0.85 * 4%

= 3.9% . cost of equity

Therefore WACC before bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)

= 3.9% . WACC before bond issuance will be equal to cost of equity in this case as there is no debt issue.

In order to calculate the WACC after bond issuance  we make the following calculation:

WACC after bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)

= (3.9% x 0.9) + (2% x 0.1)

= 3.51% + 0.2%

= 3.71%

4 0
3 years ago
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dangina [55]
The security threat detected is fraud
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3 years ago
1. Consider two countries, France and Russia, and two goods, wine and vodka. Assumethat in both countries, both wine and vodka a
padilas [110]

Answer:

France and Russia

Purchasing Power Parity (PPP):

a) Ratio of the dollar-price of vodka in France relative to the dollar-price of vodka in Russia = 2:1

b) For relative PPP to hold, the expected inflation rate in South Africa must be 0.06

Explanation:

a) Data and Calculations:

Wine in France = Vodka in Russia

Dollar price of wine in France = 1

Dollar price of wine in Russia = 2

Ratio of the dollar-price of vodka in France relative to the dollar-price of vodka in Russia = 2:1

b) This means that if the price of vodka in Russia is $1 per bottle, for instance, the price of vodka in France will be equal to $2 per bottle.

c) Data and Calculations:

Expected inflation rate in Australia = 0.02

Expected currency appreciation of Australian dollar against that of South Africa = 0.04

For relative PPP to hold, the expected inflation rate in South Africa must be 0.06 (0.02 + 0.04).

d) France and Russia's absolute purchasing power parity will hold when the purchasing power of Francs is exactly equal in France's domestic economy and in the Russian economy, once it is converted into the Russian ruble at the market exchange rate.  For our example, the relative purchasing power parity (RPPP) states that exchange rates and inflation rates (price levels) in Australia and South Africa should equal out over time.

3 0
3 years ago
A company had inventory of 5 units at a cost of $20 each on November 1. On November 2, they purchased 10 units at $22 each. On N
VashaNatasha [74]

Answer:

Cost of goods sold=  $410

Explanation:

Giving the following information:

November 1: 5 units for $20 each.

On November 2, they purchased 10 units at $22 each.

On November 6, they purchased 6 units at $25 each.

On November 8, they sold 18 units for $54 each.

The company uses LIFO (last in, first out) as an inventory method.

Cost of goods sold= 6units*25 + 10units* 22 + 2units* 20= $410

5 0
3 years ago
he _____________, fill in the blank, of an item is the amount the concession owner paid for the item plus the cost of paying con
xenn [34]

Answer:

Cost

Explanation:

The cost of an item represent the value in which the concession paid by the owner for the item. In addition to this, the concession cost would stand the workers to prepare and serve it

So according to the given situation, the cost would be considered and relevant too

So here in the place of the fill of the blanks the cost would come

4 0
3 years ago
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